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A Seat in the Limousine

CIPE co-hosted an International Day of Democracy event with the Millennium Challenge Corporation on September 15, 2016 titled, "Democratic Governance: Key Foundations to Sustainable Development."

CIPE Chairman Greg Lebedev opened the event with remarks on the intersection between CIPE and MCC and the importance of strong democratic institutions in the work the two organizations do.

This article is a transcript of the opening remarks delivered by CIPE Chairman Greg Lebedev at an event in Washington, DC. The event, "Democratic Governance: Key Foundations to Sustainable Development," was co-hosted by CIPE and the Millennium Challenge Corporation (MCC) to commemorate the International Day of Democracy (September 15, 2016).

Remarks as delivered:

I’m delighted to kick off this MCC-CIPE event because I’ve long admired the work of the Millennium Challenge Corporation. Our two institutions are in the same business, and I’ll highlight today how we complement each other’s activities

We begin with a common raison d’etre: to help countries around the world enjoy a little more freedom and little more economic prosperity by embracing certain democratic behaviors.

And that’s not easy . . . because governments get in the way. They are the problem and the solution at the same time.

I reflect on my time as a partner of a global management consulting firm and our running joke was that our projects would be so much easier if we didn’t have to deal with the client! And that’s our view about too many of the governments in the countries in which we work every day.

MCC and CIPE are perfect partners because we share an objective, but we approach the client a little differently – which I believe is beneficial.

MCC, from the top down, evaluates and targets countries that are “leaning in the right direction,” and applies a variety of development incentives because we want the recipient country to “lean” even more aggressively in the right direction.

CIPE, on the other hand, brings a bottom up focus on a country’s “democratic governance,” which is shorthand for “governmental behavior.” This is a much-misunderstood term, so I often and inelegantly describe it as a “bucket of governance stuff.” But, make no mistake: we regard this “bucket of governance stuff” as the DNA of sustainable development because without it societies can rarely if ever move ahead.

So why do I believe that “democratic governance” is the centerpiece of development? Because governments run the show – and the unsettling truth is that bad governments, of which there is no shortage, do as they want for as long as they want and all the well-intentioned foreign assistance in the world doesn’t displace them. And some would argue that it actually shores them up.

And, sadly, it’s hard to make a short list of those governments that cling to power, but we read about them every day . . . Zimbabwe, Democratic Republic of Congo, Venezuela, North Korea, Syria, Sudan and on and on.

So, MCC begins its process by objectively identifying those countries that are inclined to do some if not all of the “right things” and reward them for this behavior. This is a very smart approach both in terms of development and US national interest. And, CIPE actively works to introduce, to build out and to reinforce these same “right things” that are simply a collection of governmental behaviors and institutions that will incubate and ultimately permit an economic prosperity that is the key feature of stable societies anywhere in the world.

By the way, there’s one more unsettling truth: there’s no secret sauce to real development and social progress, because we already have the list of “right things” or “best behaviors:”

Freedom to speak and assemble

Adherence to a rule of law

Governmental transparency and accountability

Intolerance of corruption

And, most importantly, support of a market economy

And why do we regard the existence of a market economy as the single most important development ingredient? Because without something resembling a healthy economy a country and its society will be in a constant state of “distress.” It is not unlike human beings who are continuously deprived of basic nourishment; they become fragile, sickly and unproductive. And, so it is with countries. Beneath fake or socialist economies is depressed business activity, overwhelming unemployment, no tax revenues, idle youth, unhappy citizens, and, of course, growing poverty and eventual social instability.

And if this is the economic environment – as it is in too many places today – then the government begins to worry: will they lose control, or worse still, what must they do to keep their cool jobs so they can continue to employ their relatives and steal the rest of the money they haven’t already stolen.

Well, the last thing these worried government leaders want to do is embrace “democratic behaviors.” They want less public speech, no accountability, transparency is out the window and economic reforms are really hard and socially unsettling. And, MCC and CIPE see this every day.

In short, these bad governments will do almost anything to keep their seat in the limousine . . . with a callous indifference to their citizens’ interests or well-being.

CIPE recognizes that all the ingredients of “democratic governance” don’t always exist at the same time or in the same place. The world is imperfect, so we’re in the “bits and pieces” business; we do what we can where we can.

In one country we’ll support economic reformers or teach and promote business advocacy.

In another, we’ll work to reduce informality or train parliamentarians to develop wise economic legislation.

And in other places, we’ll confront corruption or promote the value of women in the workplace.

But all of these initiatives are intended to advance – albeit incrementally – a favorable climate for “democratic governance” and “free market behavior” because one can’t really exist without the other.

I appreciate that this is a “chicken and egg” situation, but maybe better said, there exists a “co-dependency.” At the end of the day, you and we know that governments that adopt and practice more of these “democratic behaviors” – not all, but some – are more inclined to encourage rather than inhibit free market activity.

And, on the flip side, countries where open markets are actually producing greater prosperity are more inclined to tolerate the frequently annoying democratic institutions and behaviors that we know foster social stability, sustainable development and a positive relationship with the United States.

I admire and applaud what MCC and CIPE do every day: they work to keep governments on the right path. It’s far from easy, it’s certainly not fast, and our good work is too often washed away by bad governments who have little if any regard for their citizens or their countries. To many that’s understandably disappointing and a developmental deterrent, but to all of us . . . it’s another day at the office.

Greg Lebedev is Chairman of CIPE’s Board of Directors. He is also a Senior Advisor to a number of institutions – to the President and CEO of the U.S. Chamber of Commerce, to the Robertson Foundation for Government, and to the Potomac Research Group, LLC, an independent equity research firm. Lebedev regularly advises on business strategy and international affairs, and undertakes special projects involving trade, development and global corporate governance. In 2008, he was President George W. Bush’s nominee to be U.S. Representative to the United Nations for Management and Reform.

Before these assignments, Lebedev served as President and CEO of the American Chemistry Council (ACC). Prior to the ACC, he was the U.S. Chamber’s COO and Executive Vice President for International Policy and National Security Affairs, Managing Director of the Chamber’s public policy think tank, the National Chamber Foundation, and President of the Center for Corporate Citizenship.

Earlier in his career, Mr. Lebedev was a Senior Partner of The Hay Group, and served as Senior Vice President and CFO and acting-CEO of the American Trucking Associations. He also held a number of senior governmental assignments. President Gerald Ford appointed him to the State Department post of Assistant Inspector General of Foreign Assistance/Deputy Assistant Secretary of State. Before that, he served in the Bureau for Security and Consular Affairs and was one of Henry Kissinger’s youngest Deputy Assistant Secretaries. Prior to his State Department tour, he was Deputy Special Assistant to the President of the United States at the White House.

Lebedev earned a Juris Doctor degree from the School of Law of the University of South Dakota, and holds a Bachelor of Arts degree from the same university.

The views expressed by the author are his own and do not necessarily represent the views of the Center for International Private Enterprise (CIPE). CIPE grants permission to reprint, translate, and/or publish original articles from its Economic Reform Feature Service provided that (1) proper attribution is given to the original author and to CIPE and (2) CIPE is notified where the article is placed and a copy is provided to CIPE’s Washington office.